ESPN Ponders Subsidizing Wireless Data Plans

Posted by Nathan Kirsch| Fri, May 10, 2013 - 2:47 PM

Are you worried about overage fees on your wireless data plan when you watch online videos? It appears that ESPN doesn’t want its 45+ million digital users to stop watching their content on mobile devices and is considering doing something about it. ESPN sees overage fees and capped data plans being detrimental to the company’s business plan, so ESPN wants to give viewers a stress-free mobile experience. They also want to continue raking in the ad dollars, which have to be higher than the bandwidth costs. The catch is that you in order for ESPN to cover your phone or tablet data costs, that you must be using the ESPN App. ESPN will have a deal with carriers where they pay for the bandwidth that their App uses and you wouldn’t have to pay for it or have it count against your monthly data plan. You would of course still be responsible for all the other data you consume outside the app, but all your sport needs would be covered by ESPN. What do you think?

No such arrangement is imminent, and ESPN isn’t sure if the economics will work out, the people familiar with the matter said. There are also concerns that deals of this nature could attract the scrutiny of telecom regulators. Such a deal would mark a significant development in the wireless business, creating a new model for media and telecom companies to share the costs of bringing bandwidth-guzzling services to consumers. Another way media companies could compensate carriers is by sharing advertising revenue with them.